India is vulnerable to the global slowdown this year led by advanced economies. So says Crisil.

The European Union (EU) accounts for 46 per cent and 42 per cent of India’s leather and footwear exports respectively.Likewise, the US commands a large share in items made up of textiles and rags. India’s domestic labour-intensive sectors such as textiles, footwear, and leather depend significantly on these two regions. Such a high concentration of exports (especially on discretionary items such as textiles and leather products) to these two regions makes domestic exporters vulnerable to a slowdown in their economies.

India’s growth cycles have become highly synchronised with those of advanced economies over the years. The most important and direct impact of this will be reduced demand for Indian goods abroad. The US and the EU are two of the largest destinations, accounting for 18 per cent and 15 per cent, respectively, of India’s merchandise exports in fiscal 2022. And exports to these two regions have been on a declining trend since July 2022, barring a slight uptick in November and December, which could be a reflection of festive demand towards the year end.

Global economic activity is projected to slow down in 2023 as the peak impact of synchronised monetary policy tightening across major economies manifests.

Indian luxury handbag brand Aranyani has opened a flagship store in the UK.

The name Aranyani means goddess of the forest and the new boutique offers an experience based on the idea of a journey through the forest while highlighting the brand’s focus on sustainable artistry, nature and quality. The 550 sq ft ground floor area is primarily focused on retail — creating a calm and inviting space to showcase the quality and artisanal skills used to make each bag. And on the 850 sq ft lower ground floor there’s a space for a VIP experience, allowing the customisation of the product, in a luxurious yet approachable environment. The customer starts their journey at the forest edge as they enter the store, moving deeper under the canopy as they explore – this is a place of curiosity and intrigue with a range of bags beautifully illuminated on elegant, tiered shelving as if resting on the branches of trees. The space draws the customer into the central glade, a sculptural area of soft light that illuminates hero products on large slabs of British stone and Irish marble. The brand brings together the best heritage artistry from India and incorporates them on bags in a contemporary aesthetic. Aranyani provides an inspiring and enriching environment for artisans and craftsmen to collaborate and create. Each Aranyani handbag is the result of their collective inspirations, talents and dedicated craftsmanship.

For the fourth quarter Crocs’ sales were up 61 per cent.

Revenues for the fullyear were up 54 per cent compared to 2021. Crocs brand revenues increased 14 percent. Wholesale revenues increased 17 per cent while direct to consumer revenues rose 12 per cent. In 2022, Crocs North America revenues increased six per cent while direct to consumer comparable sales were up by 11 per cent. Asia Pacific revenues surged 47 per cent while Europe, Middle East, Africa, and Latin America grew 47 per cent. Overall, income from operations increased by 24 per cent in 2022.

Consumer demand for the Crocs and HeyDude brands has been exceptional, fueling record 2022 revenues for both brands at a top-tier adjusted operating margin of 28 per cent. The company anticipates another record year in 2023 with growth expected to be led by sandals and international for the Crocs Brand and increased market penetration for HeyDude.

Crocs has industry-leading operating margins and generates robust cash flow as a result of the simplicity of its product lines and the high penetration of molded product. The company remains confident in gross leverage being below two times by the middle of this year giving it greater flexibility with capital allocation.Looking ahead, Crocs expects first-quarter 2023 revenues to grow approximately 27 per cent to 30 per cent compared to first-quarter 2022 revenues.

Readymade garment exports from Bangladesh increased 15.56 per cent to $22.996 billion in the first six months of fiscal 2022-23 year (July-June) compared to exports worth $19.900 billion in July-December 2021, indicates data released by the Export Promotion Bureau.

Bangladesh's textile and garment machinery market is now worth over $4 billion as the sector has registered 20 per cent year-on-year growth, thanks to its strong textile and garment manufacturing strength, say experts. As the world’s second largest garment exporter, one of the major factors that drives Bangladesh’s booming textile and garment industry is the growing foreign direct investment in the industry.

The country’s cheap labor, preferential location in the heart of the Asia-Pacific region, and government support are some reasons why a large amount of investment has been made in Bangladesh’s textile and garment industry. This has resulted in manufacturing and employment growth and helped increase foreign exchange inflow which Bangladesh needed, particularly now since it received an IMF bailout of nearly $5 billion.

Luring FDI from China, South Korea, Japan

With foreign exchange reserves steadily declining, the government is keen to attract FDI to boost the nation’s foreign exchange reserves back to healthy levels. While the government is welcoming FDIs across industries, its core strength in manufacturing of textiles and readymade garments has a solid infrastructure backing, creating a plug and play situation for foreign investors. The government's efforts to attract FDI in both within and outside the Export Processing Zones (EPZs) is not industry-specific, and hence not meant to exclude any specific manufacturing sector beyond the scope of investment.

South Korea has traditionally been the single largest foreign investor in the local readymade garments and textiles sector and the government is impressing upon South Korea to invest more. Meanwhile, with China not wanting to manufacture low-end readymade garments due to its rising manufacturing costs, Bangladesh is trying hard to relocate these manufacturing units its own land. Bangladesh Garment Manufacturers and Exporters Association president Faruque Hassan has sought China’s cooperation to transform their RMG industry from cotton to non-cotton and high-value items in order to move up the value chain. As Japanese companies with manufacturing units in China had started relocating to Vietnam and Cambodia after China imposed a zero Covid lockdown policy Bangladesh also jumped into the fray to attract Japanese companies to relocate to the country.

Manufacturers concerned over FDI inflows

Most of the FDI in Bangladesh RMG sector is not big ticket. Rather, they are foreign collaborations of medium or small, size which then pit themselves against local small and medium size manufacturers who are increasingly concerned about competition and their ability to fund superior manufacturing processes against foreign collaboration units. Local manufacturers are already upset that their government has allowed foreign investments outside the export processing zones.

The government’s policy of unconditional approval to FDI to attract foreign exchange can put the local manufacturers in a tight spot as they will lose competitiveness and eventually business. Hence, local manufacturers want FDI in Bangladesh RMG sector limited to the free processing zones only. A while ago, local manufacturers had agreed to FDI outside free processing zones to only manufacture high-end fashion garments for new markets like Russia, Brazil, South Africa, Australia and India. However, once the trend started, there seems to be no holding back.

Indian investors look to non-cotton RMG sector

As per BGMEA president Faruque Hassan, businesses in India are interested in investing in manufacturing of non-cotton goods in Bangladesh. The investments are lined up for not only the free processing zones but also outside it. Hassan had accompanied the Bangladeshi PM on her visit to India and met several medium to large size businesses that he hopes will invest in the country. Indeed, India’s investments in Bangladesh’s non-cotton RMG sector may not raise heckles of local manufacturers at the moment, but there is a possibility in the future as many manufacturers are moving towards non-cotton products.

EU countries are dumping 37 million items of junk plastic clothing in Kenya every year.

Junk clothing has been found in some places piled as high as four-storey buildings and spilling into rivers. The amount of junk clothing arriving in the country has significantly increased in the last few years. The clothing is often soiled with vomit, heavy stains or animal hair. It reflects an increase in cheap, disposable fast fashion. Countries like Kenya are fast fashion’s escape valve. Traders buy bundled clothing blind and dump the growing percentage that turns out to be useless. So in effect the addiction to fast fashion saddles poor countries like Kenya with polluted soil, air and water. The backbone of the fast fashion industry is plastic, and plastic clothing is essentially junk. More than two thirds of clothing is now made of plastics like nylon and polyester which are impossible to recycle. Between 2019 and 2020, the EU and the UK exported over five million tons of used textiles. Textiles are sent from the EU not only to Kenya but destinations like Ghana, India, Nigeria and Pakistan. Exporting junk clothing to poorer countries has become an escape valve for overproduction. Fashion waste is too dirty or damaged to be reused and creates serious health and environmental problems for vulnerable communities.

Archroma is all set to buy Huntsman Textile Effects.

Archroma is a global leader in sustainable specialty chemicals and solutions for industries such as textiles, packaging and paper, paints and coatings. Based in Switzerland, the company operates a highly integrated, customer-focused platform that delivers specialized performance and color solutions in more than 100 countries. The company offers all kinds of after-chemical treatments that the textile industry has been demanding. So in athletic wear, for instance, the company has bacteria control for medical applications. And there are non-iron shirt chemical ranges for people who are starting going to the office again. Huntsman Textile Effects is the textile effects business of Huntsman Corporation. With this acquisition both Archroma and Huntsman Textile Effects hope to bring together their expert teams and highly complementary product portfolios to offer customers and brand partners the high performance they expect while respecting natural resources and the planet. Both companies are known for sustainability and innovation and complement each other. Archroma is stronger in chemicals than in dyes, whereas, for Huntsman, its textile effects business in dyes is stronger. The two can bring to the global customers the full i.e. end-to-end range of textile dyes and chemical products.

Pharrell Williams is the new creative director of Louis Vuitton’s men’s wear division.

Williams has established himself as a cultural and global icon over the past 20 years. He is a 13-time Grammy winner and two-time Oscar nominee with experience working with luxury brands and designers. Williams collaborated with the luxury group LVMH in 2004 and 2008. He had a massively popular sneaker collaboration with Chanel in 2017 and a unisex clothing collection in 2019 that he designed with Lagerfeld. He also has his own fashion brands, including Billionaire Boys Club and Icecream. His creative vision beyond fashion is expected to lead Louis Vuitton towards a new and exciting chapter. Williams replaces Virgil Abloh who died of cancer at age 41 and was a groundbreaking designer and tastemaker known for merging streetwear and high fashion. Louis Vuitton is seen as having a strong point of view in everything it does. The brand has been relentless with its engagement with millennials and is noted for investing in people. Louis Vuitton is known for taking steps to limit environmental damage. At one time Louis Vuitton was using salpa, a type of reconstituted leather, to produce some of the models for its leather goods products, which enables it to avoid using real leather. The group uses leather offcuts to reduce waste.

Ikea plans to lower carbon emissions in 2023.

Ikea will address emissions across its supply chain and operations, from factories to transport. Plans will also target the impact of its roughly 460 stores. The company has a target to become climate-positive by the end of this decade. Ikea plans to reduce more emissions than it emits. Since 2016, Ikea has reduced its emissions of carbon dioxide equivalents by 12 per cent, including by five per cent in 2022. Ikea’s 2030 climate goals require boosting renewable energy use and reducing the climate footprint of its materials. Also tucked among those challenges is the glue that holds some of the furniture giant’s most popular products together. The glue Ikea uses to make its beds, sofas and everything in between makes up five percent of its total carbon impact. Moving toward glue from renewable sources is a key enabler to achieving Ikea’s overall climate goal. But a big challenge with bio-based glues remains that not all are compatible with the company’s current conventional glue and application technology. So Ikea’s factories have to switch to organic glues and update their machines and technology. The company plans to increase the share of renewable energy in its supply chain, targeting 100 per cent renewable energy in its production by the end of the decade.

For the first ten months of this fiscal India’s exports of readymade garments increased by five per cent.

Exports of cotton yarn, fabrics, made-ups, and handloom products declined by 28 per cent against the corresponding period of the previous fiscal. Carpet exports came down by 23 per cent. Manmade yarn, fabrics and made-ups exports went down by 11 per cent. India’s readymade garment exports decreased by three per cent in January 2023. Exports of cotton yarn, fabrics, made-ups and handloom products declined by 37 per cent. Carpet exports fell by 27 per cent. Manmade yarn, fabrics and made-ups exports came down by 21 per cent. India’s overall exports (merchandise and services combined) in January 2023 grew by 14 per cent over the same period last year. Overall imports in January 2023 were 0.94 per cent higher over the same period last year. During April 2022 to January 2023, India’s exports of merchandise and services increased by 17 per cent against the corresponding period of last year. Overall imports also increased by 22 per cent from the same period last year. India is among the top garment manufacturing countries in the world. Indian textiles and apparel products have a history of fine craftsmanship across the entire value chain from fiber, yarn, fabric to apparel with high global appeal.

Knitwear exports from Tirupur grew 1.5 per cent in January 2023.

The first month of this calendar year has brought some cheer to textile manufacturers in Tirupur. Knitwear exports rose marginally after falling for five consecutive months. For the ten-month period total knitwear exports from Tirupur grew by three per cent. The knitwear segment in Tirupur has seen some improvements now when compared with December 2022 quarter. The cotton yarn movement that was sluggish over six months has now got revived. With increasing enquiries/orders from garment units, spinning mills have now started running for seven days as against four days earlier. Knitwear exports from Tirupur started to decline in August 2022 as a result of the Russian-Ukraine war. High inflation and recessionary trends led to subdued demand for textiles and apparel in the US and European markets. During August 2022 to December 2022, total knitwear exports from Tirupur fell by 21 per cent when compared with the previous year. With gradual improvements from January 2023, Tirupur exporters hope to start fiscal year 2024 with good growth in the June 2023 quarter when compared with the March 2023 quarter. Meanwhile, Tirupur exporters feel bringing down the interest cost for export credit will provide the much-needed competitiveness to exports.